So after a stock's lengthy run-up, it's always important to watch for signs of heavy institutional selling.

For a market leader, the 50-day moving average — which computes a running average of price closes over the past 50 trading sessions — can act as a support level during an uptrend. But it can also act as a resistance level during a downtrend.

If a stock breaks below the 50-day line in heavy volume and can't rally back, it's often a signal that buying demand is drying up and the stock's run is ending. Keep in mind that one or two bursts of institutional selling can often presage more sales ahead. Sometimes, it can take a fund several weeks to exit a position.

Studying the price action of former market leaders just before they broke down can help you act quickly when a current leader you own starts to falter.

After a huge breakout in April 2003, Deckers Outdoor (DECK) rode its 50-day line higher to a monster gain. Its price action wasn't a fluke. Big funds were accumulating the stock in anticipation of continued strong demand for Deckers' Ugg boots.

After an initial breakout below 10, Deckers eventually stormed to an all-time high near 25 in January 2004. It also cleared a series of bases before topping out at 49.12 in late December 2004.

In January 2005, the first signs of institutional selling started to appear. Big percentage declines in heavy volume are a telltale sign that institutions are unloading.

On Jan. 6, Deckers fell 7% and dropped below its 50-day line in volume 170% higher than average(1)Two days later, it tried to reclaim the line but reversed in big volume. (2) It was time to sell.

In February, Deckers was repeatedly turned away at the 50-day line. Clearly, buying demand was drying up. Finally, it staged a spectacular reversal on Feb. 24 (3), yet another sign of institutional selling. By April, the stock lost nearly 58% of its value.

Stocks remained mixed, with only the Nasdaq in positive territory late Thursday. The tech-heavy index rose 0.3% after bouncing back from a 0.8% deficit. Gains in chip, networking and data-storage stocks lifted the Nasdaq. Meanwhile, the Dow Jones industrial average and the S&P 500 were off 0.1% ...

After a strong run, Nike (NYSE:NKE) is expected to slow the pace when it reports quarterly results in coming days as foreign exchange headwinds take their toll. But its underlying business is forecast to remain strong as its products — from basketball shoes to sportswear — continue to ...

For the second session in a row, the major stock indexes on Thursday bounced off morning lows in a bullish positive reversal. Two days aren't enough to make a trend, but positive reversals are a sign of strength. In early afternoon trade, the Nasdaq was up 0.5% after being down 0.3%. The Dow Jones ...

04/23/2015 01:18 PM ET

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Investor’s Business Daily provides exclusive stock lists, investing data, stock market research, education and the latest financial and business news to help investors make more money in the stock market. All of IBD’s products and features are based on the CAN SLIM® Investing System developed by IBD’s Founder William J. O’Neil, who identified the seven common characteristics that winning stocks display before making huge price gains. Each letter of CAN SLIM represents one of those traits.

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